Kurabo Industries (3106) Q2 2024 earnings summary

Executive summary

• H1 FY3/24 revenue rose 0.8% YoY to ¥72,653m and operating income rose 13.8% to ¥3,877m; both exceeded initial forecasts.

• Growth in Chemicals and Environment & Mechatronics offset weaker Textiles; price pass-through and a richer product mix supported operating profit despite higher input and energy costs.

Financial highlights

• H1 revenue was ¥72,653m, up 0.8% YoY; operating income was ¥3,877m, up 13.8%, with operating margin at 5.3% versus 4.7%.

• Ordinary income fell 2.6% YoY to ¥4,525m and net income attributable to owners fell 22.7% to ¥2,522m, reflecting lower non-operating gains, including FX gains, and higher income taxes.

• H1 sales exceeded the initial forecast by 6.1% and operating income by 104.1%.

• Operating cash flow was ¥5,833m versus an outflow of ¥1,718m in the prior-year period; ending cash and equivalents were ¥10,469m.

Outlook and guidance

• FY3/24 guidance was unchanged: revenue ¥154,000m (+0.3% YoY), operating income ¥7,900m (-8.9%), ordinary income ¥8,500m (-15.2%) and net income ¥5,800m (+5.1%).

• FY3/24 planned capex is ¥7,500m, up 61.4% YoY; depreciation is ¥5,000m, down 3.5%.

• Full-year segment guidance: Textiles revenue ¥53,000m / operating income ¥100m; Chemicals ¥61,000m / ¥3,300m; Environment & Mechatronics ¥26,200m / ¥2,700m.

• Full-year segment guidance: Food & Services revenue ¥10,000m / operating income ¥600m; Real Estate ¥3,800m / ¥2,300m.

• Guidance was maintained despite H1 outperforming forecasts, citing continued economic uncertainty and plans to accelerate growth and expansion investment.